great post @afterlife. Not much I can or would add, except to...

great post @afterlife. Not much I can or would add, except to comment on valuation.

VEEM's recent profits have been low. But if you look back a few years, they were making a lot more profit then. There are a few reasons for the decline ... higher marketing costs for marketing and proving the gyro technology (~$1m p.a), lower mining work, lower and variable defence work, some production inefficiencies. But the outlook in this existing business (by which I mean VEEM excluding gyros) is perhaps rosier now, I think. For example: Since gyros are gathering scale in sales and being accepted, then gyro marketing/demonstrating costs should fall (witness the comment in the presso about "winning the [boat-building] yard"; and the MD's comment/slide about reaching the inflection point), defence spend may increase and become more consistent, the production inefficiencies are said to be addressed, and propeller sales are growing, etc. If so, could the existing business get back to earning profits much closer to the levels they did a few years ago?? Then you throw in the gyro business which could quickly start achieving multi-million profits (they have a niche, and have invested $13m to date in this technology, and they remain confident they will get their payback). At a market cap of just $65m, with a lot of IP patents, some hero products in growing markets, reasonable diversification, a good track record, and family-owners with a long term shareholder orientation, that's a terrific package.

@SuperWealthy asked about issues. On my worry list are: the high and growing level of overdue receivables (circa $1m IIRC), relatively high corporate debt, and the MD's comments about gyros having margins lower than the existing product set. Surely given the investment since 2011, VEEM's IP, and weak competition in this space, they should be more ambitious here and expect higher margins form gyro sales?? (Or is he refering to short term margins only, and growing volumes will see medium to long term margins improve over time??). That combination of issues might also prompt the question: is the financial / commercial management at the business effective, or is it too soft?. Something to watch, in my view